Evaluation of Functional Airspace Block (FAB) initiatives and their contribution to performance Improvement

Transcription

1 Performance Review Commission Evaluation of Functional Airspace Block (FAB) initiatives and their contribution to performance Improvement NEFAB UK-IR NUAC Baltic FAB EC FAB CE Danube SW Portugal-Spain Blue MED Produced by the EUROCONTROL Performance Review Commission upon the invitation of the European Commission DG-TREN EXECUTIVE FINAL REPORT October 2008

2 Background information This report presents an independent evaluation of FAB initiatives and their contribution to performance improvement in the Member States and associated States of the European Union. It was prepared by the EUROCONTROL Performance Review Commission for the European Commission, at the latter s request. The report was developed through extensive formal and informal consultation with European ATM Stakeholders at every stage of the project. The final report was presented to the European Commission in October Copyright notice and Disclaimer European Organisation for the Safety of Air Navigation (EUROCONTROL) This document is published in the interest of the exchange of information. It may be copied in whole or in part providing that the copyright notice and disclaimer are included. The information contained in this document may not be modified without prior written permission from the Performance Review Commission. The views expressed herein do not necessarily reflect the official views or policy of EUROCONTROL, which makes no warranty, either implied or express, for the information contained in this document, neither does it assume any legal liability or responsibility for the accuracy, completeness or usefulness of this information. Printed by EUROCONTROL, 96, rue de la Fusée, B-1130 Brussels, Belgium.

3 PRC Evaluation of FAB Initiatives Executive Final Report Executive Summary 1 EXECUTIVE SUMMARY 1.1 Background By letter dated 23 May 2007, the European Commission (EC) invited EUROCONTROL, and specifically the independent Performance Review Commission (PRC), to evaluate the Functional Airspace Block (FAB) initiatives and their added-value to performance improvements The objectives of this evaluation were (1) to describe the current initiatives, (2) to describe best practice for the drawing up of safety case and cost benefit analysis, (3) to establish a specific framework for evaluating performance improvements over time, (4) to identify key constraints and difficulties experienced and to suggest approaches to mitigate them, and (5) to suggest opportunities to amend the current governance, legal and regulatory arrangements to facilitate the creation of FABs. 1.2 Abstract This Executive Final report provides the executive summary and the factual assessments/conclusions/recommendations of the detailed Final Report which is available on PRC website ( The Final Report provides a comprehensive description of the origins and evolution of the FAB concept, a description and an assessment of the nine declared FAB initiatives at 1 July 2008 as well as a comparative analysis of those. The Final Report also reviews Cost-Benefits Analyses (CBAs) developed by the FAB initiatives and their approaches to safety cases before presenting conclusions and recommendations The analysis is based on a framework, described in annex II of the Final Report, which identifies the characteristics, scope and schedule of each FAB, describes the arrangements set out to develop the FAB initiatives, and defines Key Performance Areas (KPA) and Key Performance Indicators (KPI). Figure 1-1 summarises the KPAs and KPIs. Figure 1-1: FAB Performance framework Safety Efficiency Economic Operational Environmental Technical Airspace events per flight Safety maturity Compliance with ESARRs Financial costeffectiveness KPIs ATFM Delay Horizontal routing extension Delegation of ATS services provision Alignment of FAB with main traffic flows Airspace use and design: Implementation of SES FUA Airspace design and capacity planning process Environmental impact due to horizontal routing extension Interoperability of ATM systems Commonality of ATM systems The Final Report has been produced based on more than 50 meetings, extensive documentation and consultation: Visits to the FAB representatives and formal dossiers validated by them, i

4 PRC Evaluation of FAB Initiatives Executive Final Report Executive Summary Written consultation, using comments received on the Interim Report (19 Feb. 2008) and draft Final Report (12 Sept. 2008), both displayed on the web; Oral consultation at two open meetings (22 Oct and 25 Sept. 2008); Presentations and comments in different meetings (Single Sky Committee, Provisional Council Coordinating Committee, ANS Board, CMIC, ETF, ATCEUC, etc). 1.3 Assessment of the nine declared FAB initiatives Nine FAB initiatives were declared to the European Commission at 1 July Their characteristics vary significantly (see map in Figure 1-2). FAB EC, which is located in the core area of Europe, is the largest FAB initiative (37% of flight-hours and costs). Figure 1-2: Map of FAB initiatives - July 2008 Map of FAB initiatives 01/07/2008 NEFAB UK-IR FAB EC NUAC Baltic FAB CE Danube SW Portugal-Spain Blue MED At 1 July 2008, all 27 States of the European Union were involved actively in a FAB initiative except Latvia. Latvia had undertaken discussions with the Baltic initiative and was participating in the NEAP co-operation initiative, but was not a member of any FAB There are significant differences in the actions that are proposed, the progress that the FAB initiatives have made, the timescale over which implementation is expected, and the arrangements adopted for implementation. ii

5 PRC Evaluation of FAB Initiatives Executive Final Report Executive Summary All FABs plan to cover, to some extent, the SES I legislative requirements of airspace and operational changes. A number of FABs have also extended their plans to address issues of service provision integration, ATM systems, training and ATFM The PRC s assessment of progress made by the nine FAB initiatives during the course of the study (August July 2008), and planned next steps, is as follows: Baltic FAB: There was limited progress during the first half of The initiative put a TEN-T bid for funding of a feasibility study in June 2008 and expect to produced a feasibility study by Q Although relatively small, this FAB could foster significant performance improvements in the area, where there are specific issues, such as high traffic growth and the Kaliningrad area. A strong commitment by concerned States and ANSPs, the addition of Latvia to the FAB, and close links with neighbouring FABs would raise the prospect for benefits. Blue Med: There has been significant progress in 2008: the feasibility study was completed and a declaration of intent was signed by the CAA Director Generals in July Blue Med associates non-eu States, such as Egypt and Tunisia, which are important interfaces of the SES. The Definition phase (to be) agreed at a Ministerial conference in November 2008 should seek performance improvements beyond the relatively modest ones identified in the first economic assessment. Danube FAB: Progress has been made with Stage 2 of the feasibility assessment, which the concerned States and ANSPs have endorsed. The relatively high performance benefits identified in the CBA would need to be confirmed, and performance targets set for implementation. A decision whether to move to a preliminary design phase is anticipated towards the end of FAB Central Europe: The finalisation of the Master Plan, CBA and safety assessment, in March 2008 along with the ANSPs Memorandum of Cooperation and Member States Declaration of intent (with a MoU to follow at the end of 2008) demonstrates real progress over the period for FAB CE. A phased implementation is expected to start in 2009 with an initial scenario, followed by static and dynamic scenarios. It will be important to seek further benefits, as those identified in the CBA are relatively low. FAB Europe Central: The comprehensive feasibility study and CBA indicate prospects for high performance improvements in relative and absolute terms. FAB EC is on the critical path to meet the capacity requirements in the densest part of European airspace. Owing to its size and central position in Europe, the success of FAB EC will be important for the success of the SES. The strong involvement of all parties concerned in an important success factor. The phased implementation will be launched with an official declaration in November 2008 starting with eight targeted key task forces. NEFAB: NEFAB is in the early stages of preparation. A pre-feasibility study was undertaken during the summer of 2008 covering a high level CBA, safety assessment and identification of possible show stoppers. The feasibility study is expected to be completed by May NUAC: NUAC is one of the most developed projects. It shows prospects for significant performance improvements. The ANSP CEOs have decided to proceed with the operational alliance option (having considered merger and alliance scenarios). But this needs to be confirmed with a final political decision iii

6 PRC Evaluation of FAB Initiatives Executive Final Report Executive Summary by the Member States before the end of NUAC may become one of the service providers in NEFAB. SW Portugal-Spain: There has been limited progress during the first half of In October 2008, the two ANSPs have decided to launch in 2009 the development of a feasibility study of the FAB improvements, making use of simulation tools (areas, routes, sectors) and including a CBA, to be performed during It will be important to generate significant performance improvements in the area, whether through a FAB, or otherwise. FAB UK-Ireland: This FAB was officially declared to the EC in June 2008 and started its operations. The first meetings of the FAB Management Board and Supervisory Committee took place in July and August 2008, respectively. The Board is now focussing on key priority areas and developing concrete projects for this FAB to deliver genuine performance improvements. Significant performance improvement should be sought, beyond the modest ones identified in the CBA There are wide variations in FAB schedules. The main milestones of FAB initiatives are summarised in Figure 1-3. Figure 1-3: Timescale and main milestones for implementation of FABs UK-Ireland NOW SW Portugal-Spain NUAC NE FAB FAB EC: Phase Phase 2 1 Phase 3 FAB CE: Initial Static Dynamic Danube Proposal and inception Feasibility assessment Decision in principle Preparation for implementation Implementation Blue Med: Initial Full Operations started Baltic Conclusions and recommendations The objective of SES regulations is to improve ANS performance. This first PRC evaluation of FABs shows that FABs can be an effective tool, amongst others, to reach SES performance objectives provided there are a shared vision, ambitious objectives, and strong commitments from the stakeholders to effectively reach these objectives. iv

7 PRC Evaluation of FAB Initiatives Executive Final Report Executive Summary In fact, the proposed SES II package reinforces the FAB concept, the objective of which is to optimise and/or integrate the provision of ANS and related ancillary functions. This is a clear step forward During 2008, six (out of nine) FABs have devoted significant effort and resources in developing feasibility studies. One FAB initiative, FAB UK-Ireland, was declared officially in June 2008 and came into effect in July It is clear that the legal obligation to create FABs has generated a positive momentum for co-operation between ANSPs and between Member States, and opportunities for performance improvements beyond those achievable individually. This should be preserved and reinforced States should reaffirm their commitment to create FABs during the discussion on SES II in the Transport Council of the European Union in December Moreover, in order to further strengthen the momentum and focus the attention of all involved stakeholders, the PRC suggests that more detailed deadlines are introduced in SES II concerning the creation of FABs Most significant progress has taken place where there was a strong involvement of all key stakeholders (States, staff, military and airspace users) as well as cooperation between NSAs. The PRC therefore recommends strongly developing or strengthening social dialogue between staff representatives and ANSP management. It also recommends organising effective cooperation of NSAs and emphasising the need to address military issues and civil-military coordination Since all FABs follow boundaries of existing FIRs (and current ATS delegations), and that most FAB initiatives have concentrated primarily on improvements to the design of airspace within the FAB, there is a need to ensure the connectivity of the European network across FABs Improvement in flight-efficiency within each FAB provides significant opportunities for savings to airspace users and benefits for the environment. However, since approximately one quarter of European route extension issues can only be solved across FABs and Europe-wide, a strong and effective network management and design function at European level, as proposed in SES II, is crucial The definition and implementation of an appropriate charging regime within FABs, irrespective of national boundaries, will be key for an efficient route design and management of traffic flows Clearly each FAB is different and faces different political, operational, technical and economic challenges. The evaluation has identified that FAB initiatives show wide differences in scope, timescales and approaches. It is therefore clear that a flexibility of approach needs to be maintained, as long as performance improvements are delivered Several FAB initiatives implicitly or explicitly consider one or more of the following ANS cooperation scenarios: co-operation agreement, operational alliance (some joint functions) and merger. A progressive evolution is sometimes foreseen, although no clear intentions and schedules have been defined so far. It is interesting to note that a representative staff organisation advocates the full merger scenario in the MOSAIC project A comparison of feasibility studies shows that a lot of effort is devoted in each FAB on the same issues and with similar results. Moreover, most FAB initiatives have v

8 PRC Evaluation of FAB Initiatives Executive Final Report Executive Summary reported similar impediments to the creation of FABs. Greater guidance and coordination for the establishment of FABs would help avoid misunderstandings and duplication of work. The PRC therefore proposes some concrete ideas for the development of guidance/requirements in terms of operational concept, safety, ATFCM/ASM, interoperability of systems, charging, sovereignty, liability, and CBAs In particular, the issues of sovereignty and liability require careful attention from an early stage within the FAB in order to find and implement the proper legal arrangements which might require amendments to Aviation Acts, contractual arrangements between ANSPs and full involvement of the military The definition and implementation of an appropriate charging regime within FABs, irrespective of national boundaries, is key for an efficient route design and management of traffic flows By October 2008, only six CBAs (or high level economic appraisal) had been received, albeit with various levels of maturity and completion. Available CBAs were organised differently and built on different assumptions, which makes a comparison of expected performance benefits challenging Nevertheless, for illustration purposes, the PRC has attempted to evaluate the net projected benefits in 2013 and in 2018 for each FAB, and to relate these benefits to the 2006 total economic costs (ANS provision costs + costs of route extension and ATFM delays incurred by airspace users). A summary of this comparison is presented in Figure Although only orders of magnitude should be considered, double digit benefits are anticipated from FAB EC, NUAC and Danube. This confirms that FABs are one of the SES tools to improve ANS performance. It will be important to ensure that such levels of improvement are achieved Moreover, the evaluation shows that most savings are expected from improvements in flight-efficiency and delays, rather than savings in ANSPs service provision costs. As the latter form the bulk of ANS total costs, this indicates room for yet further improvements. Figure 1-4: Summary of quantified benefits from available CBAs 2013 benefits in M 2013 benefits as % of 2006 total economic costs % from flight efficiency or delay 2018 benefits in M 2018 benefits as % of 2006 total economic costs Blue Med % % % from flight efficiency or delay Danube * % 99% % 99% FAB CE 6 1% 53% % 55% FAB EC 260 8% 77% % 83% NUAC 47 17% 72% 51 18% 81% UK-Ireland 12 1% 100% 40 4% 63% *: Assumptions and expert judgements would need to be confirmed. vi

9 PRC Evaluation of FAB Initiatives Executive Final Report Executive Summary Notwithstanding the fact that it is one of the requirements for FABs, no Safety Cases could be developed at this stage, since they can only be performed when the FAB is fully specified operationally. The corresponding wording in SES I (Article 5(2) of the airspace Regulation) would need to be replaced by Safety assessments A number of FABs have identified specific performance indicators and associated performance objectives/targets. This anticipates some of the SES II proposals. Where applicable, and with some prerequisites, setting performance targets at FAB level in lieu of national level would have several advantages: It would reduce the number of local target setting processes and the work of the European Commission, NSAs, users and the Performance Review Body; It would reinforce the cohesion of ANSPs, reduce fragmentation while keeping the bottom-up approach, and give a very concrete meaning to FABs There are prerequisites for setting performance targets at FAB level in a SES II context, in particular clear accountability and oversight for meeting the targets, a degree of prior convergence in performance, a common approach to performance management and common performance reporting in the respective FABs Finally, it will be important to monitor progress and maintain pressure on FABs to deliver genuine performance improvements and meet the planned deadlines and deliverables. The PRC recommends that a similar review of FABs is undertaken periodically, using the same framework to assess progress made with reference to the situation at 1 July 2008 presented in this report, and to the respective FAB plans. The detailed Final Report is available on PRC website: vii

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11 2 FACTUAL ASSESSMENT SUMMARY, CONCLUSIONS, RECOMMENDATIONS 2.1 Introduction This chapter provides factual assessments, conclusions and recommendations from the PRC s Evaluation of Functional Airspace Block initiatives at 1 July They are based on initial findings and conclusions presented in the Interim Report, a second round of visits, information update and validation with FAB representatives as required, extensive consultation of all stakeholders and PRC s independent assessment The first part presents 16 factual assessments. These factual assessments cover the following areas: A) Review of the nine FAB initiatives; B) Their expected impact on performance The second part gives PRC conclusions and 22 pragmatic recommendations to reinforce the FAB initiatives in order to reduce ANS fragmentation and further improve their performance. 2.2 Summary of the PRC s factual assessment as of 1 July 2008 A) Review of the nine FAB initiatives Factual assessment 1: Progress in some but not all FAB initiatives in first half of 2008 As indicated in the Interim Report (19 February 2008), the progress of FAB initiatives until the end of 2007 was generally disappointing and this resulted in: - The EC Communication (COM(2008) 389/2, June 2008) and suggested amendments to the SES through the SES II package; - Airspace users explicitly expressing their dissatisfaction with progress (as confirmed by IATA s letter to the PRC dated 25 June 2008 and comments made by airlines in the first Stakeholders Consultation meeting in October 2007). During 2008, six FABs initiatives made substantial progress: Blue Med, Danube, FAB-CE, FAB-EC, NUAC and FAB UK-Ireland. These FAB initiatives invested significant effort and resources in feasibility studies, and in the case of UK-Ireland implementation of the FAB Management Board. During its latest round consultations, the PRC found that: - More detailed plans, including identification of the preferred options/scenarios for the FAB and Cost Benefit Analyses were becoming available; - Member States were becoming more involved in the process through co-operation agreements and involvement in performance target setting or objectives for the FAB; - A number of FAB initiatives were developing innovative approaches to NSA cooperation, civil-military co-ordination, airspace users involvement; - Significant cooperative momentum has been created among ANSPs in some of the FABs. In the same period, there was relatively little progress in the development of the SW Portugal- Spain FAB and the Baltic FAB. Several Nordic ANSPs, after a pre-feasibility Study, agreed in March 2008 to officially 1

12 launch a new FAB initiative, NEFAB. So there were in total nine declared FAB initiatives at 1 July These FAB initiatives are reviewed in Chapter 4 of the Final Report. One EU State (Latvia) and three States bound by bilateral agreements with the EU (Serbia, Montenegro, and FYROM) are due to develop FABs, but were not actively participating in a FAB at the same date. Factual assessment 2: UK-Ireland FAB officially launched, but uncertain benefits At 1 July 2008, the UK-Ireland FAB was the first and only FAB that had been notified to the European Commission. This FAB initiative is described in detail in Section 4.11 of the Final Report. The UK-Ireland FAB has defined working relationships between States, NSAs and ANSPs in three Memorandums of Understanding. The FAB Management Board model relies upon airspace users being actively involved and taking a crucial role in the development of improvements for the FAB. This means that a significant responsibility is passed on to airlines and they will need to commit significant resources to fulfil this role. As the timing and magnitude of the changes are still to be decided by the FAB Management Board, the benefits of the model are uncertain and will need to be monitored over time. Factual assessment 3: Wide differences in scope There are wide differences in the scope of changes expected from FAB initiatives as shown in Figure 2-1 below and in an analysis across FABs presented in Chapter 5 of the Final Report. All FABs plan to cover, to some extent, the original legislative requirements of airspace and operational changes, but a number of them have extended their plans to address issues of service provision, systems, training, and Air Traffic Flow Management. This makes sense from an organisational and change management perspective, and is in line with the definition of FABs in the SES II package issued in June However, it increases the complexity of the programme of work and potentially lengthens the time to implementation and achieving some of the benefits of the FABs. Moreover, the wider scope has sometimes reflected a lack of clear objectives from Member States. 2

13 Figure 2-1: Characteristics of each FAB Baltic Development of ATM systems FAB s upe rv is ion arrangements 1 Lower a irs pa ce d Civil-military co-ordination Blue Med Development of ATM systems FAB supervision arrangements 1 L ower airs pac e d Civil-military co-ordination C om monalit y of ATM s yst ems 0. 5 Airspace management Commonality of ATM s yst ems 0.5 Airspace management Interoperability of ATM systems 0 Sector and rout e design Inte ropera bility of ATM systems 0 Sector and route design Ancillar y s er vice s Safety management system Ancillary services Safety management system Training ATM integration Cha rging Training ATM integration Char ging Danube FAB su pervision ar ra ngem ent s Development of 1 ATM systems Lower air space d Civil-military co-ordination FAB CE D eve lopme nt of ATM systems FAB supervision arr angem ents 1 Lower airspace d Civil-military co-ordinatio n Co mmonality of ATM systems 0.5 Airspace management Commonality of ATM systems 0.5 Airspace management Interoperabilit y of ATM 0 Sector and route design Interoperability of ATM systems 0 Sector and route d esign Ancillary services Safety management system Ancillary services Safety management system Training ATM integration Charging Training ATM integra tion Cha rging FAB EC Develop ment of ATM systems FAB supervision arrangements 1 Lower airsp ace d Civil- military co- ordinat ion NEFAB D e velopme nt of ATM sy ste m s FAB supervision ar ra ng em ent s 1 Lower airspace d Civil-military co-ordination Commonality of ATM systems 0. 5 Airspace management Commonality of ATM sy s te m s 0.5 Airspace man agemen t Interoperability of ATM systems 0 Sector and route design Interop erability o f ATM systems 0 Sector and route design An cillary services Saf et y management syst em An cillary services Safety management system Training ATM integration Charging Tr a ining ATM integ ration Charging NUAC Developmen t of ATM systems FAB supervision ar ra ng em ents 1 Low er airspace d Civil-military co-ordination SW Portugal-Spain Development of ATM systems FAB supervision arrangements 1 Lower airs pac e d Civil-military co-ordination C om mon alit y of ATM systems 0.5 Airsp ace management Com monality of AT M sy ste ms 0. 5 Airspace management Interoperability of ATM systems 0 Sector and route design Int erope rab ility of ATM systemss 0 Secto r and route design An cillary services S afety management system Ancillary services Safety management system Tr a ining ATM integration Charging Training ATM integration Charging UK-Ireland Development of ATM systems Commonality of ATM systems In teroperability of AT M sys te ms Ancillary services FAB supervision arrangements Training ATM integ ration L ower air space d Civil-military co-ordination Charging Airspace management Sector and route design Safety management system These diagrams describe the expected changes to be introduced as a result of the FAB. The scores represent an independent assessment based on evidences provided during consultation with each FAB initiative as well as key user and staff stakeholders. The details for each score is outlined in detail in Chapter 4 and all scores are equally valuable. The Keys to the graphics are: : Airspace : Service Provision : Systems : Supervision 3

14 Factual assessment 4: All but one FABs address upper and lower airspace All FABs, except one, address both upper and lower airspace (See Figure 2-1). This is positive, as it allows greater optimisation of flows and better interaction with the TMAs. It goes beyond the current requirements of SES I and anticipates amendments proposed in the SES II package In the proposed amendments to the SES legislation, requirements concerning FABs are not limited to upper airspace. Factual assessment 5: Large differences in timescales and approaches Large differences in timescales and deployment strategies are observed: an explicit phased approach for FAB CE and FAB EC, and an implicit phased approach for most other initiatives is the latest target date for the start of operations of known FAB initiatives. The current planned timescales of the initiatives are reviewed in detail in Section 5.5 of the Final Report. UK-Ireland NOW SW Portugal-Spain NUAC NE FAB FAB EC: Phase Phase 2 1 Phase 3 FAB CE: Initial Static Dynamic Danube Proposal and inception Feasibility assessment Decision in principle Preparation for implementation Implementation Blue Med: Initial Full Operations started Baltic

15 Factual assessment 6: A range of co-operation models A number of FABs have examined, at least in a preliminary assessment, different institutional options for the FAB (UK-Ireland, NUAC, Danube, FAB EC). These have examined a range of co-operation models, including co-operation agreements, operational alliances (some joint functions) and operational/organisational mergers. Available information, notably from NUAC, indicates prospects for greater performance improvements from the stronger co-operation arrangements. To date, FAB initiatives have preferred co-operation agreements and operational alliances, at least as a first step. This represents a pragmatic approach even if, in some FABs, the merger option remains the long term objective. It is interesting to note that a representative staff organisation advocates the merger scenario in the MOSAIC project FABs have the potential not only to improve flight-efficiency and related environmental impact, but also ANS direct costs through genuine business rationalisation and integration (service provision, support functions and common ATM systems/infrastructure). The analysis of some feasibility studies with different institutional options have shown that improvements in both direct and indirect ANS costs could be achieved through FABs, with the most promising benefits stemming from full merger scenarios. To date, the pragmatic approach for co-operation agreements taken by FAB initiatives is generally in line with the Co-op framework proposed by the European Transport Federation In this context, it should also be noted that the staff-led initiative MOSAIC explicitly proposes a full operational and organisational merger of several ANSPs, with the creation of a (civil/military) integrated inter-state public sector ANSP in core Europe. The progressive streamlining of technical infrastructure and support functions is expected to bring significant savings (scale effect), although costs and benefits are not quantified at this stage. Factual assessment 7: Various level of stakeholders involvement Airspace users, staff and military representative have been involved in the FAB feasibility in very different ways and depth The PRC has assembled statements by stakeholders on their perceived involvement in the FAB initiatives at 1 July 2008, which are summarised in Figure 2-2 below. 5

16 Figure 2-2: Perceived stakeholder involvement in FAB initiatives at 1 July 2008 FAB Users Staff Military FAB Baltic FAB Blue Med FAB Danube FAB CE FAB EC NEFAB FAB NUAC SW Portugal- Spain FAB FAB UK- Ireland Little involvement to date. PRC understands BANC starting to launch process (October 08) Users have expressed their dissatisfaction with level of involvement. Consultation meeting took place in June and intention for more involvement in next phase. Some consultation through open stakeholder meetings, but no significant influence IATA member of steering committee, Austrian on two working groups. Airlines concerned their advice not taken on board Extensive consultation with users Minimal involvement, information exchanged Regularly involved in coordination groups and contributed to the Definition phase report Minimal involvement, information exchanged Some involvement in feasibility phase. Key role in implementation phase with Chair of Service Provision working group of FAB Management Board None before FAB more mature PRC understands BANC starting to launch process (October 08) Limited consultation to date. Some consultation in June and September Working group for social dialogue, staff perception after good start limited involvement after 2007 (to open consultation) Some involvement will be stepped up during the next phase. Staff disappointed with their level of involvement to date. Some consultation, but consider it limited to information transfer Minimal involvement, information exchanged Regularly involved in coordination groups and contributed to the Definition phase report Minimal involvement, information exchanged. Do not fully understand the development of the project Trade unions involved. However, differences in perception of management and trade unions as to the extent of influence. TUs will at least be involved in Service Provision Working Group No involvement. However, already close co-operation outside the FAB Initially limited but now involved with working groups and will be involved in Definition Phase Limited involvement to date Military involved in two working groups. In future will be involved in JMACB Civil/ Military working group in feasibility study Minimal involvement, information exchanged Regularly involved in coordination groups and contributed to the Definition phase report Minimal involvement, information exchanged Military involved with feasibility study. Representatives of the military have been appointed to the FAB Management Board As the FABs mature, greater involvement of the three key stakeholders is formalised, e.g. the Management Board in the UK-Ireland FAB, and the Joint Civil-Military Coordination Board in the FAB CE. In FAB EC, the civil-military co-ordination plans produced by the working group will be taken forward. However, arrangements for the involvement of Military ANSPs in the feasibility stage are still under consideration. Factual assessment 8: All FABs follow existing FIRs and ATS delegations The bottom-up approach to FABs has resulted in FIR and ANSP groupings, following existing boundaries and ATS delegations, rather than operational effectiveness. Geographical necessity and alliances also played a role. While this may be at odds with the operational logic of FABs in the SES I legislation, addressing mainly airspace fragmentation, this is consistent with FABs as defined in the 6

17 proposed SES II package, addressing the optimisation and integration of ANSP. European-wide and cross FAB airspace design and use has only been considered peripherally through existing FAB initiatives, leaving some of the most challenging interfaces unchanged. Inter-FAB European-wide airspace design should be effectively addressed at European level The existing SES I Regulation states that airspace should be reconfigured on an operational basis regardless of existing boundaries However, the FAB initiatives have been influenced by geography, historic political relationships and cultural commonalities. As a result of this: All FAB initiatives are planning to join the existing FIRs of participating Member States - there are no examples of existing FIRs being split between FABs. All boundaries between FABs will therefore be close to existing FIR boundaries, with limited delegation of service provision across FAB boundaries (which takes place anyhow, regardless of FABs). Some airspace reconfiguration that might have operational merit is not currently being pursued through any FAB initiative. Some of the most challenging interfaces are not being addressed within any FAB, e.g. Eastern Germany and Western Poland, North East Italy and Croatia/Montenegro. Some groupings are based on geographical necessity, some Member States being located at European boundaries, for example Cyprus and Greece, Portugal and Spain It should be recognised that it is not straightforward for ANSPs to participate in several FAB projects at the same time as it requires resources and adds complexity It could be argued that, as national boundaries are unlikely to be the optimal operational boundaries between FABs, this is inconsistent with the requirements of the airspace Regulation to optimise airspace design regardless of national boundaries. For example, the core area of Europe, with the highest density of civil and military traffic, spans four different FAB initiatives (left-hand-side of Figure 2-3 below). This is unlikely to be operationally optimal. On the other hand, aside from Zürich ACC in 2007, the ACCs with the highest level of delays in 2007 tend to be outside the core area (right-hand-side of Figure 2-3 below). Figure 2-3: Core high density area DENSITY : Grid 20*20 NM -- FL nb of flights per cell - 14 Sep > 150 High capacity requirements In fact, the objective of FABs is modified in the proposed SES II legislative package, as follows: A FAB means an airspace block based on operational requirements and established regardless of State boundaries, where the provision of air navigation services and related ancillary functions are optimised and/or integrated. 7

18 FIR and ANSP groupings resulting from the bottom-up approach tend to reduce the level of fragmentation in ANS provision, which is in line with the new objective of FABs and the bottom-up approach to FABs confirmed in the proposed legislation In this case, the Europe-wide and cross-fab airspace issues remain. Most FAB initiatives have concentrated primarily on improvements to the design of airspace within the FAB. Although some FABs are also looking at the design of airspace at the boundary with other FABs, this is generally a secondary issue Therefore, there is a risk that the current boundaries of FABs will not sufficiently improve the connectivity of the European network and may freeze inefficiency into it. There is a need for an adequate mechanism to ensure the Europe-wide and cross- FAB consistency of airspace design and use. Factual assessment 9: Cross-FAB coordination has been very limited Cross FAB issues are only marginally addressed. There has been limited coordination across FAB initiatives. EUROCONTROL has organised Periodic Information Meetings with FAB programme managers. There are some examples of FABs working together, but this is generally limited and secondary to the main FAB work programme. An example of this is the interaction with the South East UK area, which FAB EC has identified as an area to be given special consideration when addressing airspace design. Factual assessment 10: Safety assessments more appropriate than Safety Cases A number of FABs have undertaken safety assessments identifying hazards and potential mitigations which could arise as a result of the FAB initiatives. These are reviewed in detail in Chapter 6 of the Final Report. No Safety Cases could be developed at this stage, since they can only be performed when the FAB is fully specified operationally. SES requirements would need to be clarified accordingly, as drawing-up of a Safety Case is one of the few requirements for the creation of FABs. Due to limited evidence, no conclusion on best practice from safety assessment / building changes to a safety case resulting from FABs can be provided This requirement probably stems from a misunderstanding of the role of a Safety Case as an evolving and live document supporting the operational development of an ANS organisation. The Safety Case needs to be updated for any operational change, whether driven by a FAB or any other operational need To date, only safety assessments have been conducted by FABs. In the case of the UK-Ireland FAB, it was concluded that there were no changes to the Safety Case to be introduced by the FAB Management Board. A number of safety assessments have identified potential safety risks arising from the FAB feasibility studies and suggested mitigations. However, as these have not yet been implemented, they have not led to a change in the operational Safety Cases As a result, only limited evidence is available for determining the best practice for the development of Safety Cases for changes expected as a result of FAB initiatives. 8

19 Factual assessment 11: Identified key impediments to progress in FABs A number of key impediments to progress in the implementation of FABs have been reported by FAB representatives and stakeholders, which have to do with operational, legal, financial and organisational matters A number of key impediments to progress in the implementation of the FAB initiatives have been reported throughout the study. The report identifies the main ones, and makes suggestions for alleviating these. a) Big bang changes are difficult: There is an emerging view, reflected in the more mature FAB feasibility studies that implementing a Big bang is difficult in relation to agreement between all stakeholders. Therefore, most FABs are taking what they consider to be more practical small steps to implement the FAB, often encompassing a number of different phases within their implementation programme. b) Loose definition of FAB requirements/ lack of guidance in SES: The loose definition of FAB requirements in the SES legislation, and a lack of guidance and implementing rules, has led to uncertainty in terms of what needs to be implemented. The wide scope of some FABs (operational, technical, financial, human, Civil-Military) has led to much longer preparation and feasibility stages than if a narrower scope had been followed. c) Lack of FAB objectives from Member States: Some FABs have been provided with clear objectives by their Member States, including deadlines and quantified performance objectives. Others have been given no or very little guidance from their States about the objectives of the FAB, leading to delay in decision making and in achieving quantifiable outputs during the feasibility studies. d) Lack of explicit incentives: The current legislation and charging regime does not provide the ANSPs in a FAB with sufficient incentives to use the FAB as one of the tools to improve their performance (as measured by safety, operational and cost efficiency). Therefore, no real sense of urgency is provided through the existing FAB mechanism. e) Different operational concepts: In some of the FABs, a wide range of current operational concepts and practices mean that significant changes and harmonisation will be needed to implement the FAB. In some FABs where there are currently significant differences between operational concepts (FAB EC, FAB CE and Blue Med), this is a potential cause of delay in effective implementation. f) Differences in governance and financial arrangements: Some FABs have identified that different financial and ownership objectives can provide an obstacle to effective implementation. This includes differences in salaries and unit rates, treatment of VAT, shareholder objectives, value of the cost of capital, etc. This provides a real obstacle to the practical implementation of a FAB. g) Liability and sovereignty: A number of FABs reported liability and sovereignty as real challenge to the introduction of the FAB. However, others tried and tested ways of resolving these issues. These could be shared and implemented across the FAB initiatives. Sovereignty always lies with the State. Sovereignty issues can be addressed through amendments to legislation and require a full involvement and cooperation with the military. Liability issues can be resolved through contractual arrangements between ANSPs following approval of the States. h) Constitutional/legal impediments in some Member States: In some Member States, there are or have been constitutional impediments to delegation of ATS provision, either on the basis that assets used to provide the service must reside within the Member State or an express prohibition of the provision of ANS by 9

20 organisations outside the Member State. The extent of these constraints has not been investigated comprehensively for all States in this study. However, the PRC understands that this issue either remains (Germany) or has been addressed in revised Aviation Acts (Bulgaria, Romania, and Austria). i) Difficulties in agreeing financial arrangements: When FABs have considered making changes to charging arrangements, they have found it very difficult because any proposed changes will lead to some re-distributional issues among airlines. Even if the changes make sense from a business and operational point of view (e.g. limit the use of longer, but cheaper, routes within a FAB), some airspace users will oppose the change. This has the potential to slow down, or prevent, the change being implemented. Moreover, where ANSPs within the FAB have different corporate objectives (profit maximising, or cost recovery) this may lead to different views of the potential to redistribute costs and revenues across ANSPs in the FAB. j) Lack of sharing of best practice across FAB initiatives: A number of FABs believe that more formal sharing of best practice should take place. The current Periodic Information Meetings (PIM) process is not seen as sufficient to fulfil this purpose in the long run. Moreover, best practices should also be shared across NSAs, which is outside the scope of this forum. B) Expected impact on performance Factual assessment 12: Various approaches and maturity of Cost Benefit Analyses By October 2008, only six CBAs or high level economic appraisal had been received, albeit with various levels of maturity and completion. Available CBAs were organised differently and built on different assumptions, which makes a comparison of expected performance benefits challenging. A range of approaches have been used for these CBAs. In FAB EC and FAB CE, an assessment of staged changes and in Blue Med a do minimum and do maximum scenarios were used to illustrate the range of possibilities Chapter 6 of the Final Report reviews the CBAs produced by the Danube FAB, FAB EC, FAB CE, NUAC, UK-Ireland, and a high level economic appraisal produced by Blue Med There is a wide range of maturity in CBAs produced to date, and all of them are subject to revision. Some are based on extensive work, including simulations and modelling, while others are mainly based on unsubstantiated assumptions or expert judgements. The latter constitute a weak basis for implementation decisions It is therefore important for FAB initiatives (or sub-initiatives) to be specific about deliverables, timescales, benefits and costs before implementation decisions are taken. In this context, the FAB initiatives could make best use of the EC framework for "Impact Assessment" and its associated guidelines (SEC (2005)791) In addition, these analyses should be published, so that stakeholders can monitor progress. This process would make the FABs more accountable to their customers and regulators. Such an approach is planned through the review by NSAs of all the business cases for the UK-Ireland FAB Management Board. 10

21 Factual assessment 13: Expected benefits from available CBAs The SES legislator and airspace users expected FABs to provide significant improvements in performance and quick wins. Due to a wide range of approaches and quality in Cost-Benefit Analyses, it is not easy to assess and compare the magnitude, timing and robustness of expected improvements from FAB initiatives. This is especially the case for safety and operational improvements. Nevertheless, for illustration purposes, the PRC has attempted to evaluate the net projected benefits in 2013 and in 2018 for each FAB, and to relate these benefits to the 2006 total economic costs (ANS provision costs + costs of route extension and ATFM delays incurred by airspace users). A summary of this comparison is presented in Figure 2-4. The largest relative benefits are identified for FAB EC, NUAC and the Danube FAB. Assumptions and expert judgements would need to be confirmed for the Danube FAB. Due to its central location and weight, FAB EC has a key role in improving the performance of the European ANS system. NUAC shows that strong cooperation can lead to significant further performance improvements in already well performing low/medium density areas. Benefits arising from other FAB initiatives tend to be lower, slower or more uncertain. For FAB UK-Ireland, the timing and magnitude of the changes to be implemented by the FAB Management Board are not yet decided, and the benefits are for the time being uncertain. In general, the higher the commitment from States and ANSPs, the higher the benefits. Feasibility studies often recommend a phased approach to implementation rather than a big bang approach. While this may delay benefits, this is a pragmatic approach taking into account the practicalities of change management in the ANS industry The objective of SES regulations is to improve ANS performance. FABs are one of the tools available for ANSPs and Member States to reach SES performance objectives. They should bring the regional component of performance improvement This assessment indicates that FABs are creating a positive momentum for cooperation between ANSPs and between Member States, which presents opportunities and prospects for performance improvements beyond those achievable individually Airspace users remain concerned that the promised benefits of SES have not yet materialised. Moreover the promised benefits of the FAB feasibility studies tend to be after 2012 and in many cases predict only modest improvements in productivity and cost-effectiveness. Airspace users do not perceive a sense of urgency from States and ANSPs to address their top priority of reduction in unit costs To give an indication of the relative benefits of the FAB initiative CBAs and to compare them, the PRC has made an attempt to derive the annual net benefits (direct and indirect benefits from savings in delay and flight-efficiency to users) and weight those benefits against the 2006 total economic costs for the FAB (see Figure 2-4 below). 11